Write TRUE or FALSE after the number of each statement (11) - (16): 11) A produc

Question

Write TRUE or FALSE after the number of each statement (11) - (16):

11) A production function shows the amount of profit a firm can make

12) All production functions show diminishing marginal returns in the short run when an input is fixed.

13) Under Perfect Competition the firms short run supply curve is its short run marginal cost curve.

14) Under Perfect Competition the individual firm has a flat demand curve.

15) Under Perfect Competition firms may make positive profits in the long run.

16) Under Perfect Competition the industry has a negatively sloped market demand curve.

Explanation / Answer

11) A production function shows the amount of profit a firm can make

FALSE

12) All production functions show diminishing marginal returns in the short run when an input is fixed.

TRUE

13) Under Perfect Competition the firms short run supply curve is its short run marginal cost curve.

TRUE

.14) Under Perfect Competition the individual firm has a flat demand curve.

FALSE

15) Under Perfec t Competition firms may make positive profits in the long run.

TRUE

16) Under Perfect Competition the industry has a negatively sloped market demand curve.

TRUE

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